Geek Estate Blog

Meet the Real Estate Tech Entrepreneur: Theresa Hus from RealEstateAgent.com

Tue, 20 Oct 2020 18:34:44 GMT

In our latest real estate tech entrepreneur interview, we’re speaking with Theresa Hus from RealEstateAgent.com.

Without further ado…

Who are you and what do you do?

My name is Theresa Hus, and I am a mother and also the CEO of Business Locate LLC, which is represented by our platform RealEstateAgent.com, trademarked as The Official Real Estate Agent Directory®. We are a marketing platform for real estate agents designed to make the connection between homebuyers, homesellers, and agents as easy and as simple as possible.

I started my career as a salesperson at a company that sold online advertising to attorneys. It lasted about three years before I decided to take things into my own hands and develop the entrepreneurial skills required to start my own business. With no experience in the real estate industry, but with strong sales abilities and determination, I took a big step into the unknown to better myself and become the entrepreneur I am today.

What problem does your product/service solve?

Our platform connects potential buyers/sellers/renters with real estate agents throughout the USA in the most effortless way possible. Our comprehensive nationwide directory is user friendly, and it makes it easy to get in touch with real estate agents, no matter where you are located in the country. By merely accessing the directory, you can get an extensive list of realtors in any desired region in the US who are ready to help you. Each agent has a personalized profile page where you can check their bio, find reviews about them, see the areas they serve, etc.

On the other hand, our platform provides a wide array of informative resources for our visitors who want to stay informed regarding the latest real estate trends or learn more about cities they wish to visit or relocate to. It is essential for us to educate the reader, and we achieve that by creating numerous blogs on topics such as: “Turning a warehouse into a Loft living space,” “Living near a cemetery” or “Benefits of living in a studio apartment”

Our elaborate list of real estate terms, along with our extensive list of FAQ’s drives a lot of traffic to our website. Our real estate related blogs provide useful information for investors, buyers, sellers, renters, agents, real estate professionals, and many others.

Nowadays, people search for agents specialized in a specific real estate niche. We want through our website to provide an easy way for clients to get in touch with agents who are specialized in a certain niche such as retirement, rentals, foreign investors, or special needs housing.

What’s are you most excited about right now?

I am most excited about the future of real estate. To see how the market is shifting and know people’s expectations as far as real estate goes. For example, people are moving away from high demand cities such as NYC and San Francisco and heading towards more rural areas, which will drive up prices of real estate in these areas.

I am excited to see that traffic to our website is increasing, and we are continuously focusing on this aspect. Also, I am focused on making our website more user friendly, continuing to inform readers of hot topics today, and expand the company during the pandemic.

What’s next for you?

We are looking forward to expanding our online presence and brand while maintaining a good relationship with our audience through quality content and advice. We are focused on improving our ability to communicate with clients and connect them with the right agents who can offer the best services. Creating a platform that can offer the right advice and services that are tailored for individual needs is what we are aiming for.

By expanding our reach we will be able to help more people connect with a real estate agent not only in the US but in other countries as well. We will continue to focus on creating fresh, quality content for our audience while improving upon the existing blogs and expanding our team. By growing our company we want our REA brand to be among the top brands in real estate.

What’s a cause you’re passionate about and why?

I am passionate about JAFCO’s mission to care about abused, neglected, and at-risk children as well as those with developmental disabilities in the Jewish community. Our business pays close attention to the special needs housing niche. In that regard, we try to create awareness around this topic while facilitating the connection with specialized real estate agents, who are best suited to help them. As a mother, I can relate with all the parents out there who have children with special needs, and by supporting JAFCO’s mission we want to encourage volunteering and fundraising.

Thanks to Theresa for sharing her story. If you’d like to connect, find her on LinkedIn here.

We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop me a line (drew @ geekestatelabs dot com).

The post Meet the Real Estate Tech Entrepreneur: Theresa Hus from RealEstateAgent.com appeared first on GeekEstate Blog.

Unpacking Opendoor’s S-4 Filing

Fri, 16 Oct 2020 16:30:57 GMT

[Editor’s note: Originally published on the Thomvest Blog.]

Opendoor, the nation’s largest iBuyer, is going public. It is doing so via a merger with Social Capital Hedosophia Corp II (NYSE: IPOB), which is a special purpose acquisition company (SPAC) led by investor Chamath Palihapitiya. Opendoor published an investor presentation as part of its merger announcement in September, and last week the company filed its S-4 (similar to an S-1, but used for companies engaged in a merger process). The transaction values Opendoor at $4.8B (pre-merger value) and the company will receive north of $1B in proceeds ($600M PIPE and $414M via merger with IPOB). While the SPAC merger process is quite interesting on its own (good posts on the topic here and here), this post will focus in on the Opendoor business, its progress to date and its prospects for the future.

Opendoor, founded in 2014, transforms the process of selling a home into a seamless digital experience, eliminating uncertainty for sellers. Sellers can go to Opendoor.com, receive an offer for their home, sign and close on the date of their choice — a dramatic improvement over the traditional selling process which can take 100+ days. In return, Opendoor receives a 6–12% discount on the market value of the home. This model is remarkably consistent with the vision described in Opendoor’s Series A presentation (worth a read). In addition to the spread captured when buying and selling homes, Opendoor earns revenue via ancillary services related to the real estate transaction, including title insurance, escrow services and home financing solutions.

In 2019, the company sold 18,799 homes across 21 markets, generating $4.7 billion in revenue (up more than 160% from the prior year). While the growth of the business has been impressive, Opendoor remains several years from profitability, having posted net losses of $339 million in 2019 and $117 million through the first half of 2020. Opendoor has ambitious plans to reach nearly 38,000 annual home sales and $10 billion in revenue by 2023. The company expects to become EBITDA-positive (on a non-GAAP basis) by the second half of 2023.

While the core vision of the company is quite elegant (“building the digital one-stop shop to move” according to Opendoor founder Eric Wu), the path to realizing that vision is incredibly complex. It requires thousands of employees across dozens of markets, holding billions in home value at any given time. So what is Opendoor’s path to becoming a large and profitable company? Below I’ve outlined five key “things you need to believe” as the company marches down that path, as well as some thoughts around the Opendoor’s valuation relative to other public real estate companies.

1. Opendoor’s economies of scale drive down per-unit expenses & box-out competitors

Opendoor has built a massive home buying and selling operation that involves more than 1,000 employees across 21 markets. The company sold nearly 19,000 homes in 2019 (about 70 transactions per business day) and purchased thousands more. That scale is quite impressive given the fragmented, hyper-localized nature of real estate. This scale gives the company some important advantages:

Opendoor has more borrowing capacity, a higher advance rate, and a lower cost of capital than many of its iBuyer peers; according to the company’s S-4, Opendoor has access to $2.8B in senior credit facilities with a total weighted average interest rate of 4%. It also has mezzanine facilities (loans that are subordinate to senior debt) in place to bring its effective advance rate to 100%. This allows the company to scale home purchase volume without tapping its own balance sheet.
Opendoor has developed a third-party network of more than 10,000 subcontractors, managed by a centralized operations team. This model has led to a 50% reduction in spend per home over the last 2 years. Additionally, the company has been able to negotiate bulk discounts on home materials (more than 40% lower than retail prices). According to Mike DelPrete, Opendoor’s average repair costs are about 2–2.5% of home value, compared to an estimated 4% at Offerpad and 5% at Zillow.

Potential Challenges

While economies of scale have definitely kicked in at Opendoor, there are also quite large fixed costs associated with operating the business that require even greater scale to overcome. For instance, in 2019 the company sold 18,799 homes and generated $301M in gross profit; however, its total operating expenses as a percentage of gross profit exceeded 180%.

Additionally, as the company continues to scale home purchase volume, incremental returns to scale may be diminished. For example, there are limitations to the bulk discounts suppliers can offer, limitations to cost of capital improvements, and some areas in which costs will always scale in proportion to volume (i.e. property taxes, utilities and insurance). And with time, its fellow iBuyers may achieve similar economies of scale. Given this dynamic, we expect the company to pursue incremental revenue streams as a means of improving its margin profile (more on this later).

2. Accumulating advantages makes the Opendoor business better & more defensible over time

In addition to cost advantages that come with scale, Opendoor has developed a set of accumulating data advantages that are more proprietary and durable in nature. This informs the price it offers prospective home sellers, as well as the renovations made on purchased homes in order to maximize ROI. From the S-4:

We have conducted over 150,000 home assessments during which we collect over 100 data points on each home and its surroundings. These proprietary data points have led us to make over one billion annotations and corrections to Multiple Listing Services (“MLS”) and tax assessor data, as well as build out new, non-traditional geospatial data assets, such as power line proximity and road noise level. The additional home level data we collect from local vendors provides structured feedback on each home and further strengthens our data moat.

This data asset leads to better pricing models that can assign specific values to home features (i.e. granite vs. tile countertops) as well as identify the areas in which home renovations may drive the highest return. Better pricing accuracy creates an important flywheel for the business: pricing accuracy improvements allow Opendoor to lower the fee it charges, which increases purchase volume, which in turn further contributes to its data asset and pricing accuracy. There are also accumulating advantages around brand which may improve Opendoor’s customer acquisition costs over time. It’s no surprise that despite the proliferation of iBuyers over the last several years, Opendoor remains the largest with 64% market share (as of 2019).

Potential Challenges

As the chart above indicates, iBuyers in total capture about 0.7% of U.S. home sale volume (pre-COVID). In Phoenix, Opendoor has bought and sold homes for the last six years, completing thousands of transactions and refining its pricing and operational models along the way. In Q1 2020, Opendoor reached 4.1% market share in Phoenix before pausing home buying due to COVID-19.

While that’s certainty impressive scale in a single market, it’s also indicative of the potential limits to capturing even more share — a large subset of sellers may simply prefer to market their homes as opposed to selling to an iBuyer at a discount. The next chapter of Opendoor’s growth story may not come solely from better pricing models, but instead by building new products and services that cater to multiple customer segments.

3. Opendoor will be able to increase gross profit per transaction via ancillary products and services

Critical to the Opendoor strategy is its ability to attach additional products and services to its transactions. The company expects its gross profit per home to increase by about $8,000 in 2023, driven primarily by these ancillary revenue streams. In its investor presentation, Opendoor highlighted several service areas, including:

Integrated title insurance and escrow services (via its acquisition of OS National in 2019). 80% of Opendoor home transactions that closed during 2019 included the in-house title & escrow service (in the markets in which the service was available). This represents $1,750 in incremental margin per home.
The company recently launched Opendoor Home Loans, a tech-enabled mortgage platform for customers looking to buy or refinance a home, which is licensed in eight states. This represents $5,000 in incremental margin per home.
Opendoor plans to add additional services over time, such as home insurance, home warranty, moving and storage, and home repair and maintenance. It believes these services represent up to $7,500 in incremental margin per home.

The roll out of multiple services allows the company to create incentives for bundling. For example, Opendoor may be willing to lower its home purchase fee (currently 6%-12%) if a customer agrees to finance their next home with Opendoor Home Loans, or purchases an Opendoor home insurance policy. Bundling may then improve seller conversion rates — according to Opendoor’s investor presentation, sellers are about twice as likely to sell their home at a 6% fee vs. a 12% fee.

This strategy has been executed successfully by home builders for many years. For example, Lennar has an in-house financing arm called Eagle Point, which is used by buyers to finance about 70% of Lennar’s home sales.

Potential Challenges

As the Lennar expample indicates, this strategy around attaching multiple revenue streams to a real estate transaction is not new — it’s common amongst real estate brokerages, home builders, and technology-enabled real estate companies like Zillow. While Opendoor has demonstrated that it can generate a high attach rate with title & escrow, the company did not provide data around its mortgage business or buy-side services. Title & escrow are typically viewed as commodity offerings and consumers are more likely to optimize for convenience vs. “shop” for better pricing (thus contributing to the high attach rate). We’ll have to wait for data on how its other ancillary services are performing in future quarters, although data from Mike DelPrete suggests that the Opendoor Home Loans attach rate is currently only about 2%.

4. Over time, Opendoor will become a marketplace for both sellers and buyers

Implicit in the company’s vision (“transforming how people move”) is the recognition that Opendoor will help enable both sides of the real estate transaction — serving both sellers and buyers. To that end, the company launched several buyer-side products over the last year, including:

Buy with Opendoor: Allows home buyers to tour homes on-demand, make an offer and shop for financing in a single platform. Opendoor acquired Open Listings in 2018 to augment its buyer experience.
Home Reserve: Launched in 2019, Home Reserve is designed for dual-track buyers; Opendoor purchases homes on behalf of a buyer, after which it will list the buyer’s existing home for sale.
Trade-In: Opendoor will coordinate the sale of an existing home and purchase of a new home such that homeowners can avoid carry two mortgages simultaneously.

Why is serving the home buyer so important to Opendoor? It directly impacts the company’s ability to expand margins and grow market share.

Margin expansion by disintermediating agents: today, nearly half of Opendoor’s per-home gross margin is lost to direct selling costs, which largely consist of commissions paid to a buyer’s agent when a home is sold. At a 3% commission on a $250,000 transaction, Opendoor is surrendering $7,500 in potential gross profit to the agent. Over time, Opendoor may be able to circumvent agents in the transaction process, which would directly impact its margin profile.
Market share expansion by building “multiple front doors”: more products and services targeting at both the buyer and seller allows Opendoor to leverage its existing team, infrastructure and brand to grow market share outside of iBuying.
Overall reduction in inventory holding period: by better matching buyers and sellers, Opendoor can increase its transaction velocity and reduce the time and cost associated with holding homes in its inventory. This is enabled by scaling the number of buyer relationships on its marketplace, and learning over time how to match individual buyer preferences to Opendoor’s inventory of homes. And in cases where Opendoor is assisting a buyer in their home search, there would be no holding costs associated with completing the transaction, leading to margin improvement.

Potential Challenges

Moving to the buyer-side of the transaction puts Opendoor in more direct competition with the large real estate portals, such as Zillow and Realtor.com, as well as the tech-enabled brokerages like Compass and Redfin. Both Zillow and Redfin have launched iBuying services as a competitive response to Opendoor, albeit at a smaller scale for now (Zillow purchases about 6,000 homes in 2019 compared to more than 19,000 at Opendoor).

But Zillow and Redfin do have some inherent advantages on the buy side that Opendoor will need to overcome — namely, large audiences of prospective home buyers using their web and mobile applications to browse listings. More than 90% of home searches begin online, and every month nearly 200 million users visit Zillow’s portal. Part of the challenge for Opendoor will be in capturing more “top of funnel” traffic on the buy side, i.e. buyers who are just initiating their home search. Perhaps that can do so by offering exclusive listings or cost-saving incentives to buyers.

5. Recent macro-tailwinds accelerate Opendoor’s path to reaching this end-state

The Opendoor investor presentation highlights several shifts in consumer behavior prompted by COVID-19, which create tailwinds for the Opendoor business. These include: a rise in demand for digital home buying and selling experiences, de-urbanization and relocation to the lower cost, suburban markets in which Opendoor operates.

Monetary policy has also created an attractive home buying environment for Opendoor and its customers. Interest rates are near record lows (and will continue to stay low), and government stimulus efforts in response to COVID-19 have led to a rise in average household wealth in 2020. This directly impacts Opendoor’s cost of capital and the demand for homes in its inventory — two critical elements of building a profitable business. [Related: In May, I published some data on the health of the U.S. housing market]

Potential Challenges

While there are certainly some interesting macro-tailwinds benefiting Opendoor, the pandemic also sheds light on how future housing market shocks may impact the company’s financial performance. Opendoor projects a 47% year-over-year decline in revenue in 2020, driven by its decision to pause home buying efforts in Q2. While a once-in-a-century pandemic is certainly a valid reason to suspend home buying, the company and its peers have been slow to resume its buying efforts, even as the broader housing market has continued to perform well. For example, in Phoenix, iBuyer volume dropped by nearly two-thirds in April. By June, the Phoenix housing market had returned in full force (home sales were up 2% year-over-year), but iBuyers have yet to scale their buying efforts to pre-pandemic levels.

This creates some questions around the company’s ability to grow during other challenging periods. For instance, during a recessionary environment in which demand for homes falls, Opendoor’s average holding period for existing inventory may lengthen (takes longer to sell a home) and its expected revenue per sale may decrease (home prices decline). This would have the effect of eroding margins, at least temporarily. During the pandemic, home prices were remarkably resilient, which helped the company maintain gross margins through Q1 and Q2 2020.

How to value the Opendoor business?

Given Opendoor’s novel business model, there aren’t any perfect public companies by which to compare valuations. There are three sets categories which are potentially relevant: real estate brokerages & portals, mortgage originators, and single-family rental REITs.

While the Opendoor SPAC agreement was announced at a $4.8B enterprise value, the price of IPOB shares have since increased, which imply an enterprise value of about $12B. This indicates that investors are willing to price Opendoor at a premium relative to other public real estate comps such as Zillow. See the graph above, which plots each comp: EV / 2021 Gross Profit multiples on the Y-Axis and 2021 project growth on the X-Axis.

Real Estate Brokerages & Portals: Both Zillow and Redfin have launched competing iBuyer offerings, but revenue attributed to those efforts is quite small relative to their core businesses. Zillow, for instance, generates about 60% of its revenue from its advertising and media business, 10% of its revenue from its mortgage business, and the remaining 30% from its home buying business. Over time, these companies will be the compete more directly with Opendoor, both as iBuyers and via traditional brokerage offerings (i.e. Buy with Opendoor).

Mortgage Originators: Rocket Mortgage recently became a publicly traded company, valued at more than $40 billion. The company has benefited from many of the same tailwinds mentioned above, particularly around the low interest rate environment which is driving demand for refinancings. Like Opendoor, Rocket Mortgage has built several ancillary revenue streams, including loan servicing, title & escrow, auto and personal loans, and an agent referral network. Rocket Mortgage and its peers typically trade on a multiple of EBITDA or net income.

Single-Family REITs: these companies have developed similar expertise around acquiring, renovating and managing a large portfolio of single family homes. For example, Invitation Homes owns 80,000 homes in 16 markets across the country. Whereas Opendoor intends to quickly sell the homes in purchases, SFRs tend to rent properties to tenants for several years, capturing both cash flows associated with rental income, as well as home price appreciation during its hold period. These companies are typically valued on a multiple of net operating income (NOI) or funds from operations (FFO).

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Inaugural REACH Canada Class Announced

Thu, 15 Oct 2020 21:37:10 GMT

On Wednesday (Oct. 14th), the National Association of Realtors and Second Century Ventures announced the Inaugural REACH Canada Class. Geek Estate celebrates entrepreneurship and innovation focused on real estate technology, and programs such as REACH are critical to developing a broader proptech ecosystem.

A special shoutout to GEM members representing four companies selected for the program:

David Steckel: Founder of Setter, a company that handles home maintenance repairs through a subscription service
Daniel DuBois: Cofounder of Key, a company that helps prospective homeowners move in and build equity sooner
Marshall Beck: Cofounder of BrokerAssist, a collaborative on-demand agent-agent referral network
Vincent Hodder and Pierre Calzadilla: Leadership at Local Logic, an AI that helps match people with places

There were four other companies also selected:

HonestDoor– A free advanced data analytics tool for both consumers and professionals
RentMoola– A cloud-based platform for finances between renters and managers
Parkbench– A sales platform that helps professionals build business in a certain geo area
Click.AI– An AI platform and workflow that provides due-diligence automation for investors

Congrats to the Inaugural REACH Canada Class!

PS: Applications for Australia’s 2021 class are now open. Interested? Apply Here

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Not Just Another Home Search Tool

Thu, 15 Oct 2020 15:59:46 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Ojo.]

A conversational real estate assistant that connects consumers with an agent when ready.

In June of 2020, they closed on a $62.5 million funding round led by Wafra. Part of that capital went towards the acquisition of Motovo, a top 5 residential real estate search site in the United States with nearly 24 million monthly visits. They also acquired RealSavvy, a real estate software platform that combines its collaborative IDX with customizable websites, branded mobile apps, and a predictive CRM. And, just today, the acquisition of the personal-finance platform Digs was announced.

GEM representation: John Berkowitz, Pat McLoughlin, & Rick Orr

What we like: They have distribution power with partnerships with Realogy, an acquisition of Movoto, and RealSavvy’s client base. They also partnered with Royal Bank of Canada’s venture division and Royal LePage, expanding internationally to Toronto, Canada.

Learn More

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Meet the Real Estate Tech Founder: Austin Allison from Pacaso

Wed, 14 Oct 2020 13:30:59 GMT

In our latest real estate tech entrepreneur interview, we’re speaking with Austin Allison of Pacaso. I’m hugely bullish on the fully managed LLC co-ownership model for second home ownership, which he co-founded along with Spencer Rascoff, Zillow’s former CEO who I worked under from 2007-2010.

With nomadism and work-from-anywhere now a national conversation, Pacaso is among the first out of the gate with strong ambitions to realize the opportunity to upend the age-old timeshare concept to satisfy expectations of Millennials, Generation X, and Gen Z for certainty and flexibility. Nomadism is a topic I’ve covered twice in the past few weeks for GEM members, the most recent being Transmission #145 (Nomadding to New Heights) that talks about Pacaso and Cabana seeing manifold opportunities to flip age-old industries (timeshares & hotels) on their heads.

Without further ado…

Who are you and what do you do?

I co-founded Pacaso to make the dream of second home ownership a reality for more people after experiencing the profound effect it had on my own life. Pacaso is my second startup. In 2009, I founded dotloop, a company that created software to seamlessly manage real estate transactions. Zillow acquired dotloop in 2015, and I continued to run dotloop as a Zillow executive until 2018. I started selling real estate at the age of 18 and worked in residential and commercial real estate for a decade. Outside of work, I enjoy running, flying and a variety of other hobbies. I live in Napa, CA with my wife Angela and our little dog Paris.

What problem does your product/service solve?

Democratization of second home ownership.

There are 30 million second homes in the US and Europe that sit unoccupied 10 or 11 months of the year. And there are millions of people who dream of second homes. Pacaso creates a marketplace around this, allowing people to buy shares of a home, and experience true but hassle-free homeownership.

The idea for Pacaso came from my own experience owning a second home for the first time. I felt like I had achieved a dream and wanted to make that feeling accessible to more people.

Is this co-living or co-ownership? Is there a difference?

There is a difference. Co-living is about living with other people, usually at the same time. Imagine for example four families owned a house together and they all lived there at the same time. That is co-living. Co-ownership is very different. With co-ownership, you simply own the house with other people but do NOT use the home at the same time. Pacaso is co-ownership. When you show up at your Pacaso, the home is 100% yours during that stay.

What’s are you most excited about right now?

I’m most excited about the overwhelming demand that we are experiencing at Pacaso. COVID has provided many families with the opportunity to rethink how and where they live and work; and therefore, second home ownership top of mind for many. And we can help!

What’s next for you?

Startups are all-consuming, especially in the early years. So Pacaso is what’s next for me! I had an opportunity to take a year off and “recharge my batteries” after leaving my role at Zillow in 2018, which was fun, but it got old fast. I’ve been yearning for the next thing, that wakes me up every morning energized and inspired. The Pacaso mission does that for me.

What’s a cause you’re passionate about and why?

Life is short and it’s my belief that everyone should strive to get the most out of it. So I’m constantly looking for ways to live a more present and enriched life. Second home ownership has helped me to live a more enriched life and I’m passionate about making that possible for more people.

Thanks to Austin for sharing his story. If you’d like to connect, find him on LinkedIn here.

We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop me a line (drew @ geekestatelabs dot com).

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The Numbers Are In: Rental Payments Received by Landlords Hit a New Low

Thu, 08 Oct 2020 16:39:19 GMT

The global COVID-19 pandemic is changing life as we know it, and nearly every industry has been forced to adapt in one way or another. The rental industry is no exception – the industry as a whole has discovered new ways to meet safety guidelines while continuing to provide essential housing services to renters across the nation.

Widespread layoffs and economic turmoil has resulted in many Americans struggling to keep up with cost-of living expenses. According to the U.S Department of Labor, the national unemployment rate is at almost 8 percent, with more than 12.5 million Americans currently unemployed. Even with federal stimulus checks and other benefits, a majority of qualifying recipients used the money to catch up on overdue bills.

Rent is often the most expensive cost-of-living expense, with one in four renters in the United States spending more than 50% of their income on housing. As a response to a climbing unemployment rate, several states across the nation have implemented an eviction moratorium to protect renters who are struggling to pay rent. Unfortunately, landlords still need to make an income in order to see a profit on their investment. The good news is that the majority of renters are still making full or partial rent payments on time. However, data from September 2020 indicates that renters are more financially burdened now than at the onset of the pandemic.

Rental payments decline as the pandemic continues

We pulled aggregated anonymous data from our Rentec Direct property management software platform, representing 620,000 rental properties nationwide. Using January and February as a baseline and considering March to be the official onset of the pandemic (when most state shutdown orders occured), our data showed that the number of rent payments received by property managers and landlords has been steadily declining over the past several months. As of September 10th, rent payments received nationwide were 35 percent lower than rent received for the same period in March, prior to the onset of the pandemic in the United States. This is the biggest drop we’ve seen in rental payments received by landlords so far, following a 29 percent drop in August.

These numbers indicate that renters are struggling financially right now more so than when the pandemic first hit the U.S. It is not necessarily surprising when you consider the fact that 16 percent of Americans have no emergency savings. The pandemic is worsening the financial hardship for many when it comes to elevated unemployment, reduced income and increased debt.

Online rental payments see little change

Interestingly, but not surprisingly, electronic rent payments in September saw a 1 percent increase compared to electronic rent payments received prior to the pandemic. When compared to the 35 percent decrease in total rent payments received, it is clear that online rent payment options increase the likelihood of on-time rent payment.

Not only are electronic payment options becoming increasingly critical for property management businesses in order to meet social distancing measures, but electronic methods also give renters the option to set up reliable automatic payments. According to a 2018 study, only 33 percent of renters who scheduled recurring monthly rent payments were charged a late fee, compared to the 47 percent of renters who were charged a late fee making manual rent payments. Of renters with no online payment options, 57 percent were charged a late rent fee.

Moving forward

It’s a true challenge to predict the future during these unprecedented times, but the continued rise of national COVID-19 cases certainly poses a threat to America’s economic future. Despite the unemployment rate decreasing slightly in recent months, this is still the highest unemployment rate our nation has seen since the Great Depression. Several states are implementing re-closures, layoffs are continuing, and federal benefits are expiring. All of these changes will absolutely impact renters across the country, potentially burdening their financial situation further.

The coming months will help us further understand the impact of the pandemic and reveal how renters will handle their cost-of-living expenses. My advice for landlords and property managers is to strongly consider implementing online rent payment options, if you haven’t already. Not only is it safer given the current social distancing mandates, but it is likely to save you money in the long run.

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Covid-19 and the Effects on Today’s Renter

Tue, 06 Oct 2020 17:00:08 GMT

[Editor’s note: Originally published on Leasera.]

IT’S TIME WE START OVER…

with the rental model.

It is quite apparent now that both the viral and economic pandemics caused by COVID-19 have globally dismantled industries and changed the way we live life forever. The scale of the economic shockwave is still undetermined, but it is clear that among the industries and populations impacted, both the rental markets and renter households are changing.

Truthfully, the already unfavorable ecosystem for renters existed long before the Coronavirus came to America. The renter model has always been a poor proposition for renters, but the pandemic is shining a bright light on these weaknesses. We need to reframe the renter concept. We need affordable rates in desirable locations, better systems to support property managers and owners, and we need to work with the services and resources that support the expanding demographic. Leasera has aligned the incentives and values propositions of all of its users so that we can cooperatively support a healthier ecosystem.

Rent is Due, COVID or Not

Nearly 16.5 million renter households have at least one worker in an industry who is likely to, or has been immediately affected by the efforts to stop the spread of COVID-19. Meaning, at least 50 million people living in a renter household are likely experiencing immediate job and income losses.

Half of this vulnerable population is made up of prime-age workers (46%) supporting the household, with children (27%), and young adults (16%) making up this demographic. Furthermore, the renter population is likely to be of color- accounting for 28% Latin and 18% Black respectively. We’ve seen the unemployment rates soar since COVID-19 shut down normal business operations, and well, the world itself. Unemployment rates rose higher in three months of COVID-19 than it did in two years of the Great Recession.

The renter demographic, largely housing the service professional population, has suffered the greatest and will continue to suffer even into a recover phase.

This type of financial hardship has affected the renter demographic significantly. Mainly in part because of the already unaffordable housing market, especially in metropolitan areas and the astronomical cost of monthly rent. In 2017 alone, we’ve seen that 46% of renter households spent more than 30% of their income on rent. The combination of the growing demand for flexibility, and the shortage in affordable housing has caused the rent to skyrocket. And while the effects of efforts to slow the spread of COVID-19 have impacted the renter demographic significantly, more than 7.1 million were already experiencing housing cost burdens and facing possible evictions. We are seeing rising income inequality combined with the lack of availability for affordable housing, and it’s causing major financial burdens for a growing number of working families; especially those of low-income workers.

The rental model needs to adjust to serve all. Partnering with organizations like HUD that provide help for low-income families is essential to providing qualified renters with affordable options and flexibility for renters. These types of programs have their limitations as well, but it’s worth exploring for property managers and owners seeking qualified tenants in need.

The Expanding Demographic

TODAY’S tenants are attracted to conveniences.

Before 2020 went on lockdown and the economy along with it, the rental proposition was still in need of restructuring. Developers focused on what they thought was the emerging millennial generation, sometimes described as, “entitled,” or “self-serving,” but unfortunately they were missing the mark. That’s not describing millennials, but rather an overly broad stroke encompassing Gen Y and Gen Z. Millennials are growing up, (between the ages of 26-40 now) creating businesses, and families. The need for flexibility, convenience, amenities, walkability, and affordable housing will continue to grow with this demographic, and will likely grow with Gen Y and Gen Z as well. Additionally, with the efforts to stop the spread of COVID-19, it is now more important than ever that industry leaders across the board meet the demands of consumers for digital services, on-demand resources, and adaptability. The modern-day renter is in search of affordable housing, in safe and up-and-coming areas, at affordable rates, and a single-source platform for usability, appreciation and ease.

Moreover, today’s tenants are attracted to conveniences rather than curb appeal and large layouts. Our tech-based world is driving busy lifestyles and the need for faster commutes, walkable amenities, transportation services, and entertainment. The rental model should be equipped to handle these expectations, and provide renters with incentive-based programs that digitally enhance and support their needs. Single-source platforms offering products and services are becoming more sought after, and Leasera is leading the way for the modern-day renter. As we move forward and see the economic changes coming, the volume of renters and the option for flexibility and access will only continue to grow. It is our job to support this demographic as they navigate the housing market.

Supporting the Modern-Day Renter Now

SUPPORT that serves renters as well as property managers or owners.

Consumers have a stronger voice and it’s time property management services started to listen, as have most other industries. Traditional property management services operate through standard software capabilities and support, typically lacking in renter-first solutions or even business practices, and difficulties with digital platforms or lack of offerings hurt tenants. Our service however is more thoughtful, advanced, and operates as the mind of the consumer- putting their needs at the center of our solutions. With this type of approach, property owners are more likely to have more tenant retention and greater operating income. We also offer an unified ILS (independent listing service), renter loyalty and benefits program, and an exciting unified marketplace of on-demand services that range from bookings for hotels, vacation rentals, dog-walking, food delivery, cleaning services and more.

As we continue to live and work through the COVID-19 pandemic, riveting changes in the housing, services and greater rental market are sure to follow. If there was a time to be excited about a new era for the rental housing market and demographic adapting, it’s now.

The post Covid-19 and the Effects on Today’s Renter appeared first on GeekEstate Blog.

Uncovering Hidden Hail Damage

Mon, 05 Oct 2020 21:36:51 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: WeatherCheck.]

WhetherCheck monitors severe weather conditions (mostly hail) so that insurance carriers, mortgage companies, and property owners can take action–for 20 homes or 2,000. Monitoring assets from $45,000 to upwards of $4.5 million, they help uncover hidden damage in the tens of thousands, still eligible for insured repairs. They can monitor conditions in the most challenging time period, 24 hours before and after an event by using proprietary algorithms to aggregate and process storm data.

The company has received 150K in funding from 2 different investors.

Represented in the GEM: Demetrius Gray

What we like: WeatherCheck provides address-specific information for owners in order to minimize out-of-pocket expenses, maximize profit, and safeguard their investment

Learn More

The post Uncovering Hidden Hail Damage appeared first on GeekEstate Blog.

5 Clients Showing Ways to Win in our COVID-19 era

Tue, 29 Sep 2020 17:22:29 GMT

[Originally published on Medium]
Tech savvy Real Estate agents have leveraged existing technologies that have been around for years, sometimes for decades, to elevate their clients showing success even before our COVID-19 era.
The COVID-19 pandemic has urged agents to pivot and adjust.
Finding the most productive ways to deliver outstanding client success in Real Estate by excelling at virtual showings is no longer a must-have business skill reserved only to the top-producing 1% of all agents.
It’s become an essential way to do business for all agents and brokers.
There is a lot of education that needs to happen in the Real Estate industry.
For having interacted with thousands of agents and brokers, we hear in unison that all of them are looking to better understand and compare their options when it comes to creating virtual client showings. When it comes to the easiest ways of connecting their clients to showings. When it comes to delivering seamlessly clients showings live and/or anytime on-demand without wasting any time on anything else than closing the deal. When it comes to marketing great client showings content socially to generate home buyer leads that close faster than those coming from expensive legacy ways of finding new leads.
That’s why we share this article with you today. Our hope is that it will give you the knowledge and the actions you can take right away to take your client showings success to new heights in these challenging times.

Consumer Grade Video Chats

There are thousands of consumer video chat apps. Yes, thousands. Most are not known to the public. Simply search for “video chat” in any app store and you can scroll relentlessly for hours down a feed of thousands of such consumer grade apps designed to chat with friends and family face-to-face.

Thousands of Consumer Video Chat apps on the app stores

The most used ones in the Real Estate industry, albeit one of them is over two decades old and the other one is over one decade old, are Skype and Facetime.

These video chat apps allow you to connect clients to virtual showings.

Yet, they do it in a way that is totally below par for dozens of reasons that would take too long to enumerate here. A few of them are related to the complexity and technical limitations related to using them for you, the agent, and also for your clients. They require that your clients be on the same type of smartphone, they don’t allow to connect clients from any screen in their lifestyle without having to download them and to set up or log into an account with usernames and passwords to remember and share with stakeholders every time the need for a new showing comes up. They don’t respect clients privacy which is a big no-no we’ve heard from day one when we looked to understand why so few agents and clients connect this way for clients showing. And many other reasons that make their use totally inadequate to the Real Estate clients showing experience.

We’ll dive deeper into the many Real Estate pitfalls of these Consumer Video Chat apps later in this article.

Millennial Social LIVE Video
Photo by Priscilla Du Preez on UnsplashThe average Instagram user’s age is around 25.
If you don’t believe it, see it for yourself in this article: “Important Instagram Stats You Need To Know For 2020” by sproutsocial.
On Facebook, the average user’s age is older, above 40 as reported in this article: “Distribution of Facebook users in the United States as of August 2020, by age group and gender” by statista.
The average age of users engaging in Facebook LIVE and Instagram LIVE skews younger, even on Facebook that has a lot of older users playing games like candy crush, when it comes to LIVE, those watching are more like 25.
They are not your home buyers.
As a result, looking to generate home buyers leads airing Facebook or Instagram LIVE is a big waste of time and efforts. You’re just missing your core target.
We discovered that early on when creating a new way to connect the right clients to client showings to close more Real Estate deals. Millennial Real Estate users we met on Instagram tried for years to sell on Instagram. The results were totally off target until they met our team @REveo.co on Insta.
It’s fun to do LIVE on Instagram and Facebook, we actually do it a lot to connect to newer agents that are up and coming. That’s actually how I met and connected with my Co-Founders Debbi DiMaggio and Kristin Frosaker!
But it is far from getting the job done when it comes to showing and selling the most expensive asset most people will purchase in their entire life — a home.
There are many other reasons why the Millennial Social LIVE Video solution is not adequate at all to delivering results for Real Estate agents and brokers.
It’s a long list here too, to keep it short before delving into further details later in this article, we can talk about the significant client privacy issues on these platforms.
When you are a professional Real Estate agent, you should make sure to respect your clients’ privacy, it’s one of the many dots you need to align carefully to deliver optimum client showing success that grows your business.
We also discovered another interesting point that we heard directly from some of our Real Estate brokerage clients. These clients initially tried to air LIVE Open Houses and LIVE Broker Opens on these social networks. Per their own words “this was a total debacle”. In other words, the Millennial LIVE Social Video experience was not at all suited to their needs. Far from being optimal to build both the agent/team and broker brands, but also totally inefficient at creating a fluid showing interaction between agents and clients.
Who wants to type questions in a chat when trying to watch a property on a virtual showing?
Very, very few people. Big opportunity loss here, too.

Corporate Team Collaboration
Photo by Chris Montgomery on UnsplashOne magnifying aspect of COVID-19 was certainly making us, the consumers, the executives, the employees, the parents, flock to enterprise collaboration solutions to keep doing some of our social and entertaining activities while social distancing.
For example, my children are taking ballet lessons via such solutions, and as a busy startup entrepreneur, I can only be very grateful for that.
We also use some of these team collaboration solutions at REveo to share a large number of product demos with our Real Estate brokerage prospective customers. They are really useful to share our laptop screens to show numbers or even to share our smartphone screens so we can show both the dynamic agent and dynamic client showing experience that we deliver. It’s useful.
These solutions were designed by corporate executives, some of them have also worked at CISCO as I did a few years back, and come from the Webex world. The traditional enterprise collaboration world.
Brokerages who defaulted to such enterprise video collaboration tools to connect clients to open houses or private showings are now, only a few months after their initial trials, realizing they are not suited to Real Estate.
It’s a bit like trying to fit a square peg into a round hole.
It’s much better, much easier, much more efficient to fit a round peg into a round hole. Solutions that are designed for Real Estate showings are doing a much better job at delivering client success hence at impacting closing rates and closing speed for both agents and brokers.
These video team collaboration solutions have many other pitfalls.
As the previous category of solutions for virtual showings that we touched on — Millennial Social LIVE Video — these solutions come with invasion of data privacy both on the showing agent and on the client sides.
Their pitfalls for the Real Estate industry come in dozens. We’ll explore further what these are and why it makes total sense that we are seeing more and more Real Estate managing brokers, CEOs, COOs, CMOs, most brokerage buying decision makers, research a new way that is designed by Real Estate leaders for Real Estate leaders to show better and close more deals, faster.

360 and 3D Tours
Virtual Tour Equipment used to Make Virtual ToursOver the summer, I did over 3,000 business contacts by phone, text message, email, LinkedIn, Instagram, Twitter, and much easier, out-of-the-box on REveo of course in just seconds, with over 600 Real Estate brokerage executives and decision makers.
Yes, it takes a bit of work to build a new brand!
Back in 2012, three years after I discovered the idea for a new way to do virtual showings that would solve for all the pitfalls of the legacy virtual showing solutions, I interacted with hundreds of home buyers in the Silicon Valley at University Café at the time (now local union 217, I recommend it! ???? ), on University Avenue in Palo Alto a few steps away from Stanford University.
I would purposefully speak to home buyers who spent their entire day driving around listings with their buyer agents most of the time. Many were out-of-state executives looking for their new place for starting a new tech executive role there, many were also locals actually.
What struck me at that time is that a large portion of them vetted the properties they were going to tour for the day on an interesting form of static marketing- 360 tours. Imagine the Google Map pedestrian experience but inside a home. The 360 experience had been around already for a few years and looking to cater to several industries, including insurance among many others.
The net of their property pre-qualification, static 360 experience — no real-time communication with agent in the canned tours that make me totally dizzy personally, and I am not the only one — was once they drove miles and miles to get there, the properties didn’t look anything like the canned tours had made them envisioned. Huge disappointment. Huge waste of time, for both the agents and the clients, and huge waste of natural resources and unnecessary pollution for no reasons.
Yet, in 2020, I did speak to a few brokerage decision makers who in spite of the steep cost and complexity of creating such tours — see YouTube video above “Virtual Tour Equipment used to Make Virtual Tours” — still want to dedicate resources to a far-from-optimal way to make their agents interact with clients to sell homes.
This will definitely change. It’s just a matter of time. A matter of education.
When you lead a Real Estate brokerage you should look for ways that are “out-of-the-box” for your Real Estate agents to deliver great client success in just seconds without any cumbersome operations to set up, nor lengthy training that drains your operational profit while delivering dismal marketing results for a high cost.
Ways that are much more dynamic at taking your agent-client interactions to a whole new level of closing rates and closing speed…

The New Way: Dynamic Real Estate Showing™

REveo Dynamic Real Estate Showing™ client success: no tech for clients from any screen, your brands and more

There is hope for the Real Estate industry to thrive with Real Estate client showings in the months, years and decades to come.

There is a new way.

There is a way that solves for all the pitfalls of the 4 old ways we touched on before that can help you get a first stab at Real Estate virtual showings. A first stab that is far from delivering the client success any of your home buyers deserves.

You should opt for a clients showing solution that delivers client success that breeds client success and constantly grows your business and all your brands while doing so.

You should opt for a clients showing experience that any of your agents or brokers can engage your target buyers in, in just seconds, without training, without anything to set up — let agents focus on delivering completely “out-of-the-box” client success.

REveo Dynamic Real Estate Showing™ agent success: launch and show in seconds, connect clients anywhere by texting, emailing, or direct messaging Dynamic REveo Showing™ clients connect to in full privacy from any screen in their lifestyle.

If you are one of the Real Estate leaders who pave the way to next-generation Real Estate technology as reported by MoxiWorks in the September 2020 edition of MILE 62 — see REveo Dynamic Real Estate Showing™ feature in the article “Our (Real Estate) World is Changing
5 tips to choose next-generation Real Estate technology” — feel free to connect with me on LinkedIn or simply contact our REveo team.

In just 5 minutes, we’ll show you the 20+ different reasons why we are the only ones to deliver the agent productivity and return on marketing investment impacts of Dynamic Real Estate Showing™.

The post 5 Clients Showing Ways to Win in our COVID-19 era appeared first on GeekEstate Blog.

A Fin-Tech Focused VC Fund

Mon, 28 Sep 2020 02:54:11 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Thomvest.]

Thomvest Ventures has Invested more than $500M across 53 companies since its founding in 1996. The firm is fully capitalized by Peter Thomson; Peter and his family own a majority stake in the news and information services company Thomson Reuters. Thomvest invests across all stages, from seed to growth equity and is focused on four primary verticals: fintech, proptech, cybersecurity, and marketing technology. Notable portfolio companies in the proptech vertical include Glide, Blend, Ribbon, PeerStreet and SoFi.

Thomvest’s market map of 220 real estate companies is a great visual resource for those first exploring the world of proptech. In addition to the venture group, Peter Thomson also runs a single-family rental portfolio called Thomvest Properties, which is based in Dallas, Texas.

Represented in the GEM: Nima Wedlake

What gets me out of bed:

Working in venture capital requires constant learning and an openness to new ideas, which makes the job interesting and fulfilling. Most importantly, we have the privilege of working closely with fantastic entrepreneurs on a daily basis. Being a small part of their journey is exciting and rewarding.

What we like: Its deep fintech roots–and more specifically alternative-financing–makes Thomvest an expert in one of the most compelling areas of innovation in real estate.

Learn More

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Apply to REACH UK by September 30th

Sat, 26 Sep 2020 19:31:52 GMT

REACH operates a variety of accelerator programs around the globe, created and operated by Second Century Ventures and backed by NAR. Its Great Britain version, REACH UK, will leverage a community of real estate industry executives, investors, mentors, and entrepreneurs across Europe and throughout the global REACH network.

Applications for the Class of 2020 are now open, but only until the end of day September 30th. That means, if you’re an early stage startup interested, you best start the process now…

Apply Now

The post Apply to REACH UK by September 30th appeared first on GeekEstate Blog.

A Waking of the iBuying Elephant

Wed, 23 Sep 2020 21:03:02 GMT

[Note from the editor: We publish a Weekly Transmission for the GEM membership that consists of long-form articles covering the spectrum from shipping container co-living spaces to the battle for listing acquisition in the first iBuyer world war. Below is a sample Transmission about the Opendoor IPO announcement. —Drew Meyers]

A Waking of the iBuying Elephant

BY DREW MEYERS
Originally Published: September 17th, 2020

There were five. Now, we’ll have six.

Of course, we’re talking about public companies in residential real estate. Opendoor announced it will follow in Porch’s footsteps by merging with a SPAC for liquidity. The iBuyer is “merging with Social Capital Hedosophia Holdings Corp. II [in a] transaction giv[ing] Opendoor an enterprise value of $4.8 billion,” reports Inman News.

I have to say, its investor presentation is a thing of beauty. I recommend you review it in full here.

I have no doubts that a speedy, certain transaction is a superior buying and selling experience for customers. But, still, that doesn’t mean it makes sense for a company to deliver it to them.

In 2019, the company generated $4.7 billion in revenue selling 18,799 homes. Compare that to Zillow Group’s $1.365 billion in revenue in its homes division.

That’s a rosy, dominant picture indeed. Right up until you dig one level deeper, into actual profits, which are noticeably absent. Opendoor’s adjusted income for 2019 was a loss of $327 million. So, if it doubles revenue by 2023 to $10 billion, won’t that actually double losses too?

I know, I know, it’s a commonly held strategy: Go years without turning profit, then magically flip a switch and rake in the profits. If Amazon can do it, Opendoor can too right? The public markets are actually quite good at valuing companies, so that alternate version where profits are irrelevant is clearly driving the valuation.

Its arrival on the public markets will be a moment of reckoning that competitors will have to counter if they want to avoid Opendoor monopolizing real estate certainty. At the same time, a SPAC IPO will give Opendoor newfound cash and leverage to expand market share now rather than later.

CLEAR REASONING
In a CNBC interview, Opendoor co-founder and CEO Eric Wu mentioned that both speed to market and Chamath Palihapitiya are the two key reasons for bypassing a traditional IPO in favor of a SPAC.

The speed is obvious. After all, why spend months with the executive team focused on taking the company public when someone else can take that headache off your plate? It makes sense that an iBuyer–which provides certainty to its customers–would choose certainty over financial maximization. It would be hypocritical to do anything but.

And Chamath is, well, Chamath. While I don’t know the guy personally, he is one of the smartest people I’ve ever heard speak. It’s clear his intellectual IQ is way beyond the norm and his track record speaks for itself. Say all you want about SoftBank, but naysayers can no longer opine that nothing more than “dumb VC” money backs Opendoor. If I were Eric and the rest of the C-Suite, I’d sleep easy knowing I now have one of the smartest internet executives on the planet heavily vested in my success.

ONE-STOP
In his interview, Eric also mentions the mission to build a vertically-integrated digital one-stop-shop to buy and sell. We’ve heard that before, obviously. That’s the end goal the entire industry is working toward. Easier said than done, though.

Chamath paints a picture in this–let’s just call it what it is–infomercial for his rationale for investing. It includes a massive, fragmented sector worth $1.3 trillion annually.

Building software is one thing, but buying and selling physical homes is something else. It’s a service business dealing with the largest transaction of people’s lives. The thing is, is there any service business that’s NOT fragmented? Wealth management. Financial services. Dentistry. Even web design. The list goes on and on. Do we really want to “smash” the transaction down into an emotionless single-click? I still stand firmly behind the stance that there is merit to the existence of friction in the process.

WHERE TO GO FROM HERE
The question is not if the elephant has sourced energy from a new watering hole, it’s what the next steps a competitor left in the wake should take.

Potential chess moves:

Compass: Make two to three major brokerage acquisitions, and then line up a SPAC of its own. Despite the whole SoftBank debacle seemingly looking up, it isn’t out of the woods yet. Independents are coming for them, with Side among them. More money, better branding, and great salesmanship can only last so long before Compass loses its luster. Speaking of, what happened to Compass’ 20% market share in 20 markets by 2020 goal? I’d move fast and break things before there’s nothing left to break.

Redfin: I have to agree with Rob Hahn that a Redfin-Opendoor marriage would be very appealing (locked). The DNA of both companies are well aligned, and a merger makes sense for all the reasons Rivers Pearce mentioned when they originally joined forces. Redfin is a juggernaut on its own; a combination would be incredibly tough competition.

Offerpad: Band together with Zavvie, OfferBarn, W&R Studios, etc.–essentially, everyone but Opendoor and Zillow–with an industry-first stance. Partner with every brokerage you can. Perhaps even go so far as to take a BPP approach, and take investments to up their stakes in success. In fact, why not invite HomeSnap into the fold as well?

Zillow Group: The audience is there, by a landslide. And it has one other significant advantage in the form of “boots on the ground” in all markets via its business arrangements with ZPA’s. Its Flex program charges a referral fee to agents on closed transactions for Zillow-originated leads–one step away from being a full-scale brokerage. Yes, I’ll say it: The next move is becoming a brokerage (update: that happened) or, more accurately, a BaaS. Bite the bullet, go all in, and acquire Side to accelerate the effort.

After a slow several months on the industry front, thank you Opendoor (and Chamath) for infusing the “what’s next” conversation with new life. We’ll have one more company to add to our proptech earnings radar for Q4, assuming Opendoor hits its goal to be public by end of Q4.

GEEK ESTATE MASTERMIND BRIEFING

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There are four parts to membership:

Long-form articles covering the spectrum from shipping container co-living spaces to the battle for listing acquisition in the first iBuyer world war (Weekly Transmission).
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The post A Waking of the iBuying Elephant appeared first on GeekEstate Blog.

A New Kind of Asset

Wed, 23 Sep 2020 20:51:31 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Buyside.]

Buyside is a Philadelphia based data analytics and marketing company that brings transparency to the demand side of real estate transactions through the centralization of anonymous buyers in a searchable database. Coming soon are Buyside seller reports.

In the first half of 2020, the Buyside platform added $54 billion in listing opportunities and worked with its broker clients to launch the National Home Valuation Week.

GEM Representation: Charles Williams & Ashley Terrell

What we like: By applying proprietary machine learning and artificial intelligence to buyer data, Buyside helps brokerages both show sellers demand for their property and match buyers to listings internally (often, before they hit the market). Bottom line: they turn consumer data that was previously significantly under-utilized into insights that can be turned into cash.

Learn More

The post A New Kind of Asset appeared first on GeekEstate Blog.

RSVP for our 4th GEMbreaker Virtual Networking Event Tomorrow

Tue, 22 Sep 2020 18:18:40 GMT

In lieu of the ability to network face-to-face, we’ve been facilitating virtual speed networking amongst the GEM membership: a series of five-minute one-on-ones using Icebreaker. In thirty minutes, participants will meet six individuals.

????Make valuable connections
????Learn what others in the community are up to

The next GEMbreaker is tomorrow, September 23rd, at 6 PM EST / 3 PM PST and we have 10 slots for “guests.” If you’re a founder, exec or tech-forward team-leader/broker and interested in meeting a few diverse proptech innovators… please email me at drew at geekestatelabs dot com with a link to your Linkedin profile and/or website.

** Event is limited to 40 attendees.

The post RSVP for our 4th GEMbreaker Virtual Networking Event Tomorrow appeared first on GeekEstate Blog.

Data-Driven Strategies for Finishing 2020 Strong

Wed, 16 Sep 2020 19:41:17 GMT

By now, many of us have settled into the continuous shifts of 2020. Hopefully you’ve learned to take it in stride and adjust your business model when necessary in order to continue hitting your goals each month.

As we rapidly cruise towards Q4, I wanted to share some insights from my digital marketing and data teams here at BoomTown to help you move your real estate business forward confidently and strategically.

Data Shows Market Rebound

The data continues to show a promising rebound for the housing market. After a massive halt in March and April due to COVID-19, pending home sales, listings, and solds have continued to increase month-over-month, showing that buyers are back in the market. Agents need to continue monitoring the data, keep an eye on the trends, and work hard to stay on top of their goals.

This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery. – Lawrence Yun, Chief Economist at NAR

There are several factors driving this rebound. Here are few of the contributors that we’ve identified.

1. All-Time Low Interest Rates

Low interest rates on long-term mortgage loans have fallen even further, hitting an all-time historic low in August, 2020. “Mortgage buyer Freddie Mac reported Thursday that the average rate on the key 30-year fixed-rate mortgage fell to 3.07%, down from last week’s 3.13%. For the second week in a row, it is the lowest level since Freddie began tracking average rates in 1971. A year ago, the rate stood at 3.75%.”(ABC News)

2. Remote Workforce/More People in 1 Home

In fact, a recent survey showed that 75% of respondents plan to increase the number of permanent remote employees. (Gartner) Additionally, a study asking employees if they would choose to go back to the office or continue to work from home showed that 60.2% would continue to work from home. (Hanley Wood)

3. Pent-Up Demand

After the drop in the March and April spring months, the data has continued to show a steady bounce back — indicating pent up demand from the spring. In fact, the number of people applying for home mortgages increased for nine consecutive weeks and recently hit the highest level in over 11 years. (Mortgage Bankers Association)

4. Life Events Continue to Happen

The pandemic may make it seem like the world has stopped, but while things have changed, life continues to go on. Major life events; graduations, babies, promotions or job changes, marriages, retirements, downsizing, etc. These events will continue to happen and consumers demand will move forward in congruence.

The Shift: Consumers & Agents Flock to Digital Solutions

Our BoomTown data is showing promising numbers for new leads generated. The boom in leads generated in July 2020 vs 2019 indicates that the usual hot spring market was delayed a bit, shifting that pent up demand to the later summer months.

New Leads Generated

Jan vs. July (Pre-Pandemic) ↑ 9%
April vs. July (Spring to Summer) ↑ 8%
July ‘19 vs ‘20 (YoY) ↑ 9%

Additionally, some good news for real estate businesses doing digital advertising: cost-per-lead has dropped pretty dramatically and digital engagement is high.

Cost-Per-Lead

Jan vs. July (Pre-Pandemic) ↓ 16%
April vs. July (Spring to Summer) ↓ 3%
July ‘19 vs ‘20 (YoY) ↓ 22%

Most notably, leads that are being generated now exhibit behavioral patterns that indicate strong buying intent. These are leads that are submitting multiple showing requests and repeatedly visiting / favoriting specific listings on our partner clients’ websites.

High Interested Leads

Jan vs. July (Pre-Pandemic) ↑ 51%
April vs. July (Spring to Summer) ↑ 53%
July ‘19 vs ‘20 (YoY) ↑ 53%

Capitalizing on The Right Opportunities

I’ve been hearing for months from brokers and agents who are BoomTown clients — the demand is there. So, the question becomes, how do we capitalize on that demand despite the obstacles posed by the 2020 market? Meaning, combating low inventory and staying productive despite pandemic measures.

Invest in Digital Presence

It’s pretty simple, strike while the demand is hot. Based on the data we’ve seen and the fact that an unprecedented amount of people are spending countless hours on their computer and social networks, there’s never been a smarter time to focus on your digital marketing strategy.

Plus, we’ve seen in our BoomTown data that ~20% of consumers who fill out a buyer lead form also respond that they have a home to sell. We are also seeing the percentage increasing by 1% each month. Agents are always looking for the silver bullet to generate seller leads, but they need to keep in mind that most buyers have a home to sell.

Educate Sellers

What do sellers want more than anything? Current, reliable data that will help them make the smartest decision about selling their home. You are the key here! Take the compelling data that you have within your system and your MLS to show your potential seller leads just how much buyer demand is in the market right now.

So, in addition to educating sellers in your market and investing in your digital presence, I recommend staying on top of the data. Now, more than ever, being “the knowledge broker” is your key to finding success in 2020 and beyond.

The post Data-Driven Strategies for Finishing 2020 Strong appeared first on GeekEstate Blog.

A Brokerage with Financial Superpowers

Wed, 16 Sep 2020 17:21:41 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Flyhomes.]

Flyhomes is a tech-enabled real estate brokerage that boosts the financing power for its clients with products such as Cash Offers and Guaranteed Offers, as well as Trade Up. The company operates in Greater Seattle, Portland, San Francisco Bay, Southern California, and Boston areas, its W2 business model enables greater control over the consumer experience and more strategic flexibility compared to traditional agents.

Founded in 2015, the company has since raised $160 million, in 4 different funding rounds.

Represented in the GEM: Tushar Garg & Steve Lane

Why I wake up excited in the morning:

I am thrilled I get to spend every day helping people with one of the most significant purchases they’ll ever make. We hear over and over that customers find their experience with us to be completely different from any they’ve had — and that they can’t imagine buying a home any other way. I can’t imagine a better job!

What we like: As one of the best capitalized companies, Flyhomes is positioned well to emerge from the ashes of cutthroat competition with a first mover advantage and its steadfast devotion to the consumer. Not to mention, they have a cool brand name that originated as a lifestyle brokerage for millennial travelers.

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A Partner in the Journey from Early Stage to Exit

Wed, 16 Sep 2020 04:44:31 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: MetaProp.]

Founded in 2015 by Zach Aarons and Aaron Block in New York, MetaProp is one of the world’s most established venture capital firms focused exclusively on the prop tech sector. They invest at the early stage, with check sizes ranging between $25,000 and $250,000.

The portfolio includes more than 115 companies, which have raised more than $2 billion and employ 1,500+ people. PadSplit, Briq, HqO are among those that have collectively exceeded $2 billion in funding with 8 successful exits. With over $110 million dispersed over three funds, they are seeking to raise $200 million for their fourth and largest fund, the MetaProp Growth Select I, to invest larger checks in later-stage companies.

MetaProp’s 22 week accelerator program and eight week pre-accelerator program are operated in partnership with Columbia University, and provide access to the RE200 mentor network of over 80 C suite real-estate professionals along with other benefits.

Represented in the GEM: Aaron Block

What we like: With over 15 billion square feet of property, MetaProp’s limited partners often serve as crucial initial customers for portfolio companies in need of distribution to fuel growth. It’s great to see its partnership with Enterprise Community Partners to help address the housing affordability crisis.

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The Real Estate Marketing Tool

Fri, 11 Sep 2020 19:34:00 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: 1parkplace.]

1ParkPlace has been designing marketing solutions for real estate agents and brokers since 1995. Some of their services include: professional consultation and business incubation, real estate recruiting and retention strategies, MLS IDX real estate lead generation systems, eMarketing solutions, eCommerce and transaction management systems.

Represented in the GEM: Steve Hundly

What we like: The team are also the creators of TheGenie.ai, a geographic farming tool used by agents in partnership with their title representatives to analyze the competition and market to prospective clients

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Creating the Bridge Between Broker and Agent

Tue, 08 Sep 2020 22:38:24 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Nest Realty.]

Formed during the 2008 housing bubble crisis by Jonathan Kauffmann, Keith Davis and Jim Duncan, Nest believes in the partnership between a brokerage and an agent by offering technology, marketing, and business management support to its agents. All agents know they need to stay in touch with their clients: the Friends of Nest program is a personal marketing campaign to stay in touch with clients through content mailed to clients that promotes the agent, not the firm, and always is tailored to the local market.

Nest has 14 franchises and is currently accepting franchise applications to expand into new markets. It also recently struck a deal with Chicago-based @properties to take a stake in the company.

Represented in the GEM by: Jennifer Kjellgren

Why I wake up in the morning excited: “I love helping our agents and our clients reach their real estate goals. I especially enjoy mentoring our agents in the craft of real estate.”

What we like: Nest Realty combines the boutique soul with the resources and backing of a large brokerage.

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Finding the Needle in the Haystack of Brokers

Fri, 04 Sep 2020 04:20:59 GMT

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Peer Reputation.]

Peer Reputation uses anonymous post-settlement reviews between cooperating agents to qualify agent quality. Through a network for agents and brokers, their mission is to identify and promote great agents by their demonstrated commitment to skill, knowledge, and professionalism. Consumers are able to research an agent’s repubility to select trustworthy agents.

The company has been able to make over 6 million connections through its 125,000 users.

Represented in the GEM by: Steven Wynands & Peter Halim

Why I wake up in the morning excited: “As a real estate agent, I can fully dedicate myself to three clients at any given time, but as a proptech founder I can protect hundreds of thousands of consumers simultaneously while also supporting agents who demonstrate professionalism and put their clients’ interests first.”

What we like: While many talk about raising the bar, Peer Reputation is doing something about it by serving what they deem to be Reputable Agents to homebuyers and eliminating the ability for agents to “buy” their way in. Negative feedback is sent to brokerages for them to use it as constructive criticism to help agents.

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